Minimum wage in 2021

Minimum wage in 2021

Author: Karin Dodič

The Minimum Wage Act determines the right to minimum wage, its amount (in gross amount) and the method of its determination and publication. If working full-time with an employer in the Republic of Slovenia, an employee is entitled to payment for work performed at least in the amount of the minimum wage. In case of part-time work, the employee is entitled to at least a proportionate share of the minimum wage.

The last major change related to minimum wage occurred in January 2020, when all the allowances determined by laws and other regulations and collective agreements, part of the wage for job performance and the payment for business performance agreed with a collective agreement or with an employment contact were excluded from the definition of the minimum wage.

In 2021, we expect new changes. In accordance with the amendment to the Minimum Wage Act from December 2018, as of January 2021, the minimum wage will no longer be determined in nominal value, but will begin to be calculated in accordance with a new formula. Thus, the minimum full-time receipt is now expected to exceed the calculated minimum cost of living by 20%. At the same time, the minimum wage is also limited upwards. In accordance with the 2018 amendment, the minimum wage may exceed the calculated minimum cost of living by a maximum of 40%. With the planned increase, the amount of the minimum wage should fully follow the guidelines of the European Union in the field of minimum wage, the basic purpose of which is to prevent poverty among employees and to ensure conditions for a dignified life.

According to the latest publicly available information, the mentioned change – the new formula for calculating the minimum wage – is not expected to take effect as early as the beginning of 2021. The proposal of the 7th Covid-19 law (the so-called “PKP7”) is supposedly introducing a freeze on the minimum wage. Thus, the new formula for calculating the minimum wage should not be implemented until 1 April 2021, and the increase would be borne by the state until the end of September.

The planned freeze on the new calculation of the minimum wage in the intervention legislation has provoked stormy reactions, especially on the part of trade unions. For the time being, however, it is expected that the measure of partial freezing of the minimum wage will be adopted within the framework of the intervention legislation and thus the entry into force of the new method of determining the minimum wage will be somewhat delayed.